Good debt, bad debt or overwhelming debt? When your debt situation is escalating towards a crisis, it’s time to look at the reasons behind your current debt challenges and assess your ability to fix them.
Ask yourself, is the debt caused by external factors or is it self-inflicted? Is it an ongoing issue or a one-time event?
|Common Causes of Debt|
|Helping out a family member||Student loans||Bad habits||Medical expenses||Poor money management|
|Large purchase or expense||No savings||Loss of job||Over-borrowing||Divorce|
|Living beyond your means||Financial illiteracy||Emergency||Life event||Accident or illness|
Once you have a better understanding of the reasons behind your debt challenges and their magnitude, consider your options, e.g., debt repayment or debt relief, managing on your own or getting help from counsellors. Possibilities include:
Explore ways to subsidize your housing costs:
The reasons that caused your debt challenges will influence the type of help you need. Use the tools and resources found on ProsperiGuide if you need to improve your financial knowledge or money management skills.
Become an informed consumer before signing a contract for debt relief or debt reduction services. To research credit counsellors, trustees in bankruptcy and debt relief programs, visit Bankruptcy and Alternatives.